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Service operation classification for risk management

Shafti, F. and Bedford, T.J. and Deleris, L. and Hosking, J. and Serban, N. and Shen, H. and Walls, L.A. (2010) Service operation classification for risk management. IBM Journal of Research and Development, 54 (3). 7:1-7:17. ISSN 0018-8646

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Abstract

We propose an empirical service-operation risk-classification model to provide managerial insights to service providers in terms of risk management. The model is developed through an investigation of the dependencies between the characteristics of service operations in consumer services and the broad classes of provider risk to which they are exposed. A survey of professional managers has been conducted in which respondents were asked to assess 30 service operations across six service dimensions and five factors representing provider risk. The data have been analyzed using statistical methods, in particular Bayesian network analysis and hierarchical clustering. The results indicate relationships between service operations, service dimensions, and risk factors. Due to the limited sample size, our findings should be regarded as preliminary. The proposed model should help determine the most relevant types of service risks based on the specific characteristics of the service provided and therefore help to develop risk mitigation strategies.